ENERGY Development Corp. (EDC)’s turnaround story gave the Lopez-led First Gen Corporation (First Gen) a further boost to account for the bulk of the parent’s profit achievement in 2014.
EDC, drawing revenues from its geothermal projects, contributed $136.1 million or 70.4 percent of First Gen’s parent full-year net profit, or earnings attributable to stockholders.
Parent First Gen impresses with a 64 percent jump in net profit to a total US$193.2 million in 2014. It earned $75.1 million more than the US$118.1 million posted in 2013, the company said in a disclosure to the Philippine Stock Exchange (PSE) on Friday.
EDC’s own performance boasts a 77.7 percent surge in net profit to $136.1 million from $76.6 million in 2013.
The geothermal subsidiary accounted for $651.7 million or 34 percent of total revenue for the year.
Clean, renewable energy going forward
First Gen President Francis Giles B. Puno said the company’s thrust to grow its clean and renewable platform gained significant momentum in 2014.
He said the Bacman and Nasulo geothermal projects of EDC were positive turnaround stories and together with the new 150 MW Burgos wind project, will increase revenues moving forward.
“We are eager to deliver the fast-track 97 MW Avion natural gas-fired project this year to
address the power supply shortage, and are progressing well with the construction of the 414 MW San Gabriel natural gas plant to be operational in the summer of 2016,” he said.
Despite the reduced earnings from the Pantabangan hydro plant, Puno said they hope to get moving on their run-of-river projects in 2015.
“First Gen’s portfolio of power plants plays a vital role in the security of power supply. It is for this reason that we continue to develop and push projects that will provide solutions to the country’s power issues,” said Puno.
The parent’s improved financial performance also came from higher earnings contributions from First Gen’s Santa Rita and San Lorenzo natural gas power plants, but the three subsidiaries’ inputs were partially offset by lower earnings contributions from unit Hydro Power Corp. (FG Hydro) due to lower water levels.
Consolidated power revenues
First Gen’s consolidated electricity revenues slipped by $2.3 million or 0.1 percent, to $1.903 billion in 2014 from $1.905 billion in 2013.
The First Gen Gas Plants accounted for $1.20 billion or 63.3 percent of total consolidated revenues.
Of the total, EDC’s revenues accounted for $651.7 million or 34 percent.
The slightly lower revenues of First Gen Gas Plants were due to Santa Rita’s 250 megawatts (MW) Unit 40 main transformer’s damage in February 2014. Unit 40 was recommissioned in July after the installation of a new transformer.
The slowdown was offset somewhat by San Lorenzo’s upgraded capacity, receipt of insurance claims, and the full-year contribution of Unit 60’s operations.
As a result, the First Gen Gas Plants contributed $121.5 million to the company’s attributable net income for 2014, higher than the previous year’s $81.9 million.
EDC’s Bacman and Nasulo plants
Meanwhile, EDC’s own consolidated revenues grew by $81.3 million mainly due to electricity generated by the BacMan and Nasulo power plants.
Nasulo’s operation allowed for a partial reversal of a previous impairment provision.
A reduction in foreign exchange losses and receipt of insurance claims further contributed to EDC’s higher earnings, the company’s filing shows.
In total, EDC contributed $136.1 million in attributable earnings for the period.
The favorable results were partially reduced by higher administrative expenses due to payments of taxes, expenses related to project development, and interest expenses of both the parent and EDC due to fresh borrowings.